The EUR/USD pair moved lower after breaking below the major demand levels around 1.2100 and 1.2000 where historical bottoms were previously established back in July 2012 and June 2010.
EUR/USD bears have previously pushed the price slightly below the monthly demand level of 1.0550 (established in January 1997). Bullish recovery was observed shortly after.
April's candlestick came as bullish engulfing one. However, next monthly candlesticks (August, September, October and November) reflected a strong bearish rejection, which took place around the level of 1.1450.
Hence, in the long term, a projected target is still seen at 0.9450 if a bearish breakout below the monthly demand level at 1.0555 occurs before the end of this month (December).
On August 24, the market looked overbought as bulls were pushing the pair further above the level of 1.1500 (daily supply level).
Recently, the intraday supply zone of 1.1360-1.1400 provided significant bearish rejection. An intraday sell entry was suggested. T/P levels located at 1.1150 and 1.1050, which were already reached.
A bearish breakout of the depicted uptrend has been executed on October 23. This enhanced a long-term bearish scenario with targets projected at 1.0800 and 1.0600.
One month ago, daily persistence below the level of 1.0950 exposed the next demand level around 1.0850 where prominent bottoms were previously established in May, July, and August.
Three weeks ago, daily persistence below the level of 1.0700 (key level) ensured enough bearish momentum towards 1.0550 (prominent monthly low) where a prominent bullish pullback was initiated as anticipated in previous articles.
A daily breakdown of the monthly demand level (1.0550) was needed to expose next bearish target levels at 1.0460 and then at 1.0300 as initial targets for the long-term bearish breakout pattern mentioned above.
However, bullish fixation above 1.0550 and 1.0700 brought the EUR/USD pair back towards the level of 1.0990 (Sell Entry).
Today, the price level of 1.0830 remains a significant key level to be watched for price actions. Bullish persistence above it brings the EUR/USD pair again towards 1.0990 where a valid sell entry can be offered again.
S/L should be placed above 1.1050.
The material has been provided by InstaForex Company - www.instaforex.com